Dollars Not the Only Way to do Business, Especially in a Recession
In 1933, President Franklin Roosevelt outlawed the hoarding of gold, ending its use as the basis of U.S. currency. Since then, the American (and the rest of the world) economy has relied on paper currency based on trust in a particular government and a currency’s value relative to other monetary systems around the world.
Sometimes though, someone wakes up and decides to spread a new dream of wealth. Here in Seattle, I’ve come across three different examples of companies with a new dream of wealth that isn’t built on dollars and cents, built rather on using technology to advance entirely new notions of how people exchange goods and services.
A few weeks ago, I wrote a story about a Seattle startup called Dibspace.com and how it is creating a mini-economy based on its own currency. Alternate means of commerce tend to gain momentum during recessions, when people feel short on cash. It turns out Dibspace founder Dominic Canterbury is not alone in taking advantage of the economic climate for alternative currency. Two other Seattle-area alternate barter startups, Divvy.com, founded by Aaron Freed, and Kashless.org, founded by Martin Tobias, have started within the past year.
“It’s a way to monetize physical goods in the real world,” Tobias says.
Money is sometimes not the only goal of these sites and their users. Helping the environment is an important aspect of Kashless, Tobias says. Unlike Dibspace and Divvy, Kashless isn’t about buying and selling—all the items listed on the site are free. “In a recession, people want free stuff,” he says. Whether it’s a slightly emptied bottle of sunscreen or an entire set of bedroom furniture, everything offered is free. And because of the way Tobias set up the website, people can use what they give away as tax deductions the same as if they gave it to Goodwill, only much more than just clothes or small goods. Tobias aims to make money from value-added services, like shipping and delivery, as well as advertising on the site. He also plans on creating a way for people to track the positive impact of giving away goods instead of sending them to the dump. He plans to do this by sending users information for instance on how many resources were saved by giving away something like an end table, instead of trashing it. He even plans to track the amount of savings in greenhouse gases that were not emitted because people used the site to give away goods instead of chucking them.
Divvy has a different idea. Its “integrated reservation and billing system” also works by boosting the exercise of underused resources, but rather than giving something away, it provides a place for people to make a group (specifically chosen and invited by the user) aware that some good or service is available and during certain times can be rented or reserved, with the option of paying through Divvy and PayPal, or billing offline. Convenience for buyer and seller is the key value, whether it’s renting out a boat or reserving a hairstylist for an hour. Freed and his team are keeping quiet right now, but a big marketing push is expected within the next few weeks, he told me.
Dibspace, as I wrote earlier this month, chose both the most obvious and least likely choice for online bartering. Since people don’t have a lot of dollars, it gives them the option of buying and selling in another medium, which it calls the dibit. With income taxed like dollars even people are paid in dibits, there’s no drain on the American economy and people have a venue for goods and services they might not have access to, especially with unemployment so high.
The unemployment rate and other economic woes may be the boost these startups need. Both Tobias and Canterbury mention the prevalence of office space for rent and office furniture for sale on their sites as a direct result of downsizing. If these sites succeed here, they may soon go national, and maybe they’ll even compete with similar start ups in other regions. Victory may depend on which company can dream the biggest.